The Economics Of Open Network For Digital Commerce


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You have to separate the shareholder role, and the shareholder benefits from a participant role and participant benefit. Let’s say, I happen to be a shareholder in one of the large market places around the world, does that mean I have access to the data in that marketplace? Absolutely not.

Now let’s talk about banks in a participant role. That’s a completely different. You could have a bank that is not a shareholder, yet become a participant, and you could have a shareholder bank that is not interested in being a participant.

Banks can play multiple roles. And let’s start with one. Banks have retail users and corporate users. ONDC is an unbundled network. A bank can enable its users—whether individual or corporate users, and enable them to buy on the network. There’s a buyer side application they can develop, they can onboard their buyers.

Likewise, they can look at the merchants and the MSMEs and the enterprises that have accounts with them, they can offer to digitise their catalogues and enable those catalogues to be visible to the network.

So, in this fashion, banks could come both on the seller side, as well as on the buyer side, obviously, as separate solutions, and be able to facilitate ecommerce transaction.

The third role that banks can play is that the they can create financial products. So, just the way you can today buy a car or food delivery from a restaurant, you can potentially buy a financial product. And so someday, insurance products, loans, fixed deposits, these products will also be available. They are in fact in conversation with us and working with us to see how that category of products and services can be developed. So that’s one model that the banks can play.

Then banks can also play a role that is for the network participants, but not on the network. So they’re neither a participant, nor are they a seller of financial products, but they are providing financial services. For example, they could provide EMI services to a customer who wants to buy a large value item, they want to buy it on EMI. When they go to their buyer application and they hit checkout, they can get a six month EMI interest. Now that has nothing to do with the network, that’s a completely different product.

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